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How Localized is the Pro-trade Effect of Immigration? Evidence from Mexico and the United States

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  • Michael Good

    ()
    (Department of Economics, Florida International University)

Abstract

I estimate the effect that immigrants have on international trade between states of current residence and states of origin. The pro-trade effect of immigrants has been thoroughly examined since the mid-1990s, connecting both destination countries with origin countries and destination sub-national divisions with origin countries, respectively. However, a recent emphasis on the importance of geographic proximity to the immigration-trade link leads me to pose the question of how localized the trade-enhancing effect of immigrants actually may be. In turn, my analysis provides the ?rst results as to the immigrant-trade nexus at the state level for both places of destination and origin, relying on a unique data set allowing the mapping of Mexican-born immigrants’ US states of residence to Mexican states of origin. I ?nd that immigrants indeed promote trade between their US states of residence and Mexican states of origin, estimating a statistically signi?cant elasticity of exports to immigration equal to 0.08. This ?gure is not only qualitatively but also quantitatively important, corresponding to $2467 extra annual exports between respective US and Mexican states associated with each additional immigrant.

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File URL: http://economics.fiu.edu/research/working-papers/2012/how-localized-is-the-pro-trade-effect-of-immigration-evidence-from-mexico-and-the-united-states/1203.pdf
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Bibliographic Info

Paper provided by Florida International University, Department of Economics in its series Working Papers with number 1203.

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Length: 34 pages
Date of creation: Oct 2012
Date of revision:
Handle: RePEc:fiu:wpaper:1203

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  1. Subhayu Bandyopadhyay & Cletus C. Coughlin & Howard J. Wall, 2008. "Ethnic Networks and US Exports," Review of International Economics, Wiley Blackwell, vol. 16(1), pages 199-213, 02.
  2. Sourafel Girma & Zhihao Yu, 2002. "The link between immigration and trade: Evidence from the United Kingdom," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 138(1), pages 115-130, March.
  3. Bart J. Bronnenberg & Jean-Pierre H. Dube & Matthew Gentzkow, 2012. "The Evolution of Brand Preferences: Evidence from Consumer Migration," American Economic Review, American Economic Association, vol. 102(6), pages 2472-2508, October.
  4. Anthony Briant & Pierre-Philippe Combes & Miren Lafourcade, 2009. "Product Complexity, Quality Of Institutions And The Pro-Trade Effect Of Immigrants," PSE Working Papers halshs-00382510, HAL.
  5. Hatzigeorgiou, Andreas & Lodefalk, Magnus, 2011. "Trade and Migration: Firm-Level Evidence (LONG VERSION)," Working Papers 2011:6, Örebro University, School of Business.
  6. Vincenzo Caponi, 2013. "Empirical Characteristics of Legal and Illegal Immigrants in the U.S," Kiel Working Papers 1835, Kiel Institute for the World Economy.
  7. Michael Good, 2012. "Do immigrant outflows lead to native inflows? An empirical analysis of the migratory responses to US state immigration legislation," Working Papers 1202, Florida International University, Department of Economics.
  8. Peter Egger & Maximilian Von Ehrlich & Douglas R. Nelson, 2011. "Migration and Trade," CESifo Working Paper Series 3467, CESifo Group Munich.
  9. Mariya Aleksynska & Giovanni Peri, 2011. "Isolating the Network Effect of Immigrants on Trade," Working Papers 2011-26, CEPII research center.
  10. Giovanni Peri & Francisco Requena, 2009. "The Trade Creation Effect of Immigrants: Evidence from the Remarkable Case of Spain," NBER Working Papers 15625, National Bureau of Economic Research, Inc.
  11. Lauren Cohen & Umit G. Gurun & Christopher J. Malloy, 2012. "Resident Networks and Firm Trade," NBER Working Papers 18312, National Bureau of Economic Research, Inc.
  12. Mark G. Herander & Luz A. Saavedra, 2005. "Exports and the Structure of Immigrant-Based Networks: The Role of Geographic Proximity," The Review of Economics and Statistics, MIT Press, vol. 87(2), pages 323-335, May.
  13. Keith Head & John Ries, 1998. "Immigration and Trade Creation: Econometric Evidence from Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 31(1), pages 47-62, February.
  14. James E. Anderson & Eric van Wincoop, 2001. "Gravity with Gravitas: A Solution to the Border Puzzle," NBER Working Papers 8079, National Bureau of Economic Research, Inc.
  15. Bedassa Tadesse & Roger White, 2010. "Cultural distance as a determinant of bilateral trade flows: do immigrants counter the effect of cultural differences?," Applied Economics Letters, Taylor & Francis Journals, vol. 17(2), pages 147-152.
  16. Canavire Bacarreza, Gustavo Javier & Ehrlich, Laura, 2006. "The Impact of Migration on Foreign Trade: A Developing Country Approach," MPRA Paper 1090, University Library of Munich, Germany.
  17. Felbermayr, Gabriel J. & Jung, Benjamin, 2009. "The pro-trade effect of the brain drain: Sorting out confounding factors," Economics Letters, Elsevier, vol. 104(2), pages 72-75, August.
  18. James A. Dunlevy, 2006. "The Influence of Corruption and Language on the Protrade Effect of Immigrants: Evidence from the American States," The Review of Economics and Statistics, MIT Press, vol. 88(1), pages 182-186, February.
  19. Roger White, 2007. "Immigrant-trade links, transplanted home bias and network effects," Applied Economics, Taylor & Francis Journals, vol. 39(7), pages 839-852.
  20. Bart J. Bronnenberg & Jean-Pierre H. Dube & Matthew Gentzkow, 2010. "The Evolution of Brand Preferences: Evidence from Consumer Migration," NBER Working Papers 16267, National Bureau of Economic Research, Inc.
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